§46.5 Terminated in Plaintiff’s Favor

The Case: Parrish v. Marquis , 172 S.W.3d 526 (Tenn. 2005).

The Basic Facts: The defendants argued that the plaintiff's malicious prosecution action was not based on a "favorable termination" of the underlying legal malpractice action. According to the defendants, the legal malpractice action was dismissed on procedural grounds, specifically, the expiration of the statute of limitations and lack of standing, which do not reflect on the merits of the case. The plaintiff counters that there was a "favorable termination" because he was successful on summary judgment.

The Bottom Line:

"As noted, the third element of a malicious prosecution claim requires that the termination of the prior lawsuit or judicial proceeding be 'final and favorable.' Christian, 833 S.W.2d at 73. As we explained in Christian, the ''finality' component ensures that the plaintiff in the original action has had an opportunity to establish probable cause for commencing suit before being called upon to defend a counterclaim for malicious prosecution.' Id. at 73-74. Similarly, the ''favorable' component is required because a judgment in favor of the original plaintiff is conclusive of probable cause, unless procured by fraud.' Id. at 74." 172 S.W.3d at 530.

"In discussing the favorable termination element of a malicious prosecution cause of action, a leading treatise states that 'the termination must not only be favorable to the [defendant in the underlying proceeding], but must also reflect the merits and not merely a procedural victory.' [W. Page Keeton et al., Prosser and Keeton on The Law of Torts, § 119 (5th ed. 1984)] ("Prosser"); see also Foshee v. S. Fin. & Thrift Corp., 967 S.W.2d 817, 819-20 (Tenn. Ct. App. 1997) (citing Prosser). The vast majority of state jurisdictions follow this rule in cases where, as in the present case, the underlying proceeding was a civil matter. See [Vitauts M. Gulbis, Annotation, Nature of Termination of Civil Action Required to Satisfy Element of Favorable Termination to Support Action for Malicious Prosecution, 30 A.L.R 4th 572 (1984 & Supp. 2005)]." Id. at 531.

"The rationale for requiring a plaintiff in a malicious prosecution action to establish that the favorable termination of the underlying proceeding was not simply based on mere technical or procedural grounds is

that it tends to indicate the innocence of the accused, and coupled with the other elements of lack of probable cause and malice, establishes the tort [of malicious prosecution].

It is not essential to maintenance of an action for malicious prosecution that the prior proceeding was favorably terminated following trial on the merits. However, termination must reflect on the merits of the underlying action."

Id . (citations omitted).

"In determining whether a specific result was a favorable termination, a court must examine the circumstances of the underlying proceeding. Siliski, 811 A.2d at 151 (citing [RESTATEMENT (SECOND) OF TORTS, § 674, cmt. j (1977)]). If a court concludes that 'the termination does not relate to the merits-reflecting on neither innocence of nor responsibility for the alleged misconduct-the termination is not favorable in the sense that it would support a subsequent action for malicious prosecution.' Lackner, 602 P.2d at 395. As the Supreme Court of Vermont has further explained:

[I]f the manner of termination, including dismissal, reflects negatively on the merits of the case, it will be considered favorable to the defendant. . . . More specifically, if the dismissal somehow indicates that the defendant is innocent of wrongdoing, it will be considered a favorable termination. . . . On the other hand, if the reason for dismissal is 'not inconsistent' with a defendant's wrongdoing, it will not be considered a favorable termination. . .. If the circumstances surrounding dismissal are ambiguous on this point, the determination should be left for trial."

Id . (citations omitted).

"In applying the principles established in the foregoing cases, courts have universally concluded that a favorable termination is not present where the underlying proceeding was resolved based on the expiration of a statute of limitations." Id. at 532.

"Courts have likewise concluded that a favorable termination is not present for a malicious prosecution claim where the underlying proceeding was resolved based on matters of standing and jurisdiction." Id.

"We are persuaded by our examination of the decisions of other states and other authority that the almost universal rule is that a dismissal of a complaint on procedural grounds that do not reflect on the merits is not a 'favorable termination' for a malicious prosecution cause of action." Id.

"In applying this rule enunciated in the foregoing cases under the appropriate standards of review, we conclude that Parrish failed to establish the favorable termination element of his malicious prosecution claim. Parrish based his malicious prosecution action on the legal malpractice complaint filed against him in 1993. The legal malpractice action ended in a summary judgment for Parrish because it had been filed after the statute of limitations expired and because the plaintiff, Miller, lacked standing. In granting the summary judgment to Parrish, the trial court did not examine the allegations of legal malpractice or make any findings regarding Parrish's representation. In sum, there is nothing in the record to indicate that the outcome of the legal malpractice action was a reflection on the merits." Id. at 532-33.

Other Sources of Note: Christian v. Lapidus , 833 S.W.2d 71 (Tenn. 1992) (holding that abandonment or withdrawal of an underlying claim that is not accompanied by a compromise or settlement or accomplished in order to refill in another forum is sufficient to establish a final and favorable termination); Kelley v. Tomlinson, 46 S.W.3d 742 (Tenn. Ct. App. 2000) (holding that grant of summary judgment dismissing underlying defamation case constituted termination in favor of defendants in underlying action, which could potentially support malicious prosecution claim); Foshee v. Southern Finance & Thrift Corp., 967 S.W.2d 817 (Tenn. Ct. App. 1997) (holding dismissal of underlying criminal case on double jeopardy grounds was not a favorable termination of criminal prosecution); Perry v. Sharber, 803 S.W.2d 223 (Tenn. Ct. App. 1990) (holding that failure of the grand jury to indict is a termination in favor of one arrested).

Recent Cases:

Roberts v. Champs-Elysees, Inc. , No. M2008-01577-COA-R3-CV, 2009 WL 1507670 (Tenn. Ct. App. May 28, 2009) (holding withdrawal of the Motion to Show Cause was procedural disposition insufficient to satisfy element that prior proceeding terminated in plaintiff's favor and further finding that separate contempt petition also did not terminate in plaintiff's favor where trial court found plaintiff would be guilty of criminal contempt but did not hold him in criminal contempt because he was not charged with criminal contempt).

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The foregoing is an excerpt from Day on Torts: Leading Cases in Tennessee Tort Law, published by John A. Day, Civil Trial Specialist, Fellow in the American College of Trial Lawyers, recipient of Best Lawyers in America recognition, Martindale-Hubbell AV® Preeminent™ rated attorney, and Top 100 Tennessee Mid-South Super Lawyers designee. Read John’s full bio here.

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